Less than two weeks before US sanctions against Iran kick in, OPEC said the oil market could shift toward a surplus and signaled it would adjust output accordingly if that were the case.

Saudi OPEC governor Adeeb Al-Aama told Reuters on Thursday the market in the fourth quarter could be approaching "an oversupply situation." Riyadh is the largest oil exporter in the world and has told the Trump administration it could step up production after sanctions against Iran take effect November 4.

"We think that demand will start dropping off as we approach year-end in accordance with regular seasonal patterns," he said at a meeting in Vienna, according to Reuters. "We have the flexibility to adjust our production to mirror it."

While OPEC said in a statement out Thursday that it was satisfied with developments in the oil market, it also cited a potential buildup of supply. Countries bound by supply constraints reached a conformity level of 111% in September 2018, according to the cartel. Meanwhile, US crude stockpiles have risen for five weeks in a row.

"The committee however expressed concerns about rising inventories in recent weeks and also noted looming macro economic uncertainties which may require changing course," the statement said.

But against a backdrop of falling output in key OPEC countries, including Venezuela and Angola, forecasters warn sanctions could squeeze the market. The International Energy Agency said in a recent report that cutting Iran out of the market could make maintaining global supply "very challenging."

Oil prices rose more than 1% from recent lows after Saudi Arabia, in a reversal, said Washington Post journalist Jamal Khashoggi was killed in a planned operation in its Istanbul consulate. Brent is currently trading around $76 per barrel and West Texas Intermediate at around $67 a barrel.